ASIC’s levy estimate of at least $1,500 plus $3,138 per financial adviser for FY 2020-21, an increase of $712 from the previous financial year, proves that the current levy model is unsustainable, argues Judith Fox, CEO of SAFAA.
‘This increase comes on top of an increase of 160 per cent in the two years to 2019-20 and is coupled with a sustained reduction in the number of financial advisers across which this cost can be recovered’ stated Ms Fox. ‘The recent increases to the ASIC levy are not sustainable and are being unfairly attributed to the current population of financial advisers.’
Ms Fox has pointed out that the stockbroking and listed securities advice sector has an exemplary record as regards the handling of customer complaints. As reported in the most recent AFCA Complaint statistics, out of a total of 80,833 complaints received during the period 1 October 2019 to 30 September 2020, only or 0.6% were made against stockbrokers.
‘It appears to our members that ASIC is funding action against large financial institutions that were the subject of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry by charging those entities not called before the Commission,’ Ms Fox says. ‘No stockbroking or listed investment advice firms were called before the Royal Commission.’
SAFAA’s concerns are amplified by the statement made by ASIC at a recent Senate Legislation Committee hearing into the bill implementing the Single Disciplinary Body, that ASIC has not been provided with additional funds to administer the new disciplinary regime.
‘We are concerned that the costs of the new displinary body that are incurred by ASIC will be passed on to our members and push up the final levy. ASIC’s cost estimates have routinely been between 25-55 per cent less than the final levy amount, making it extremely difficult for businesses to plan for this expense.’
‘We call on the government to urgently review the ASIC levy model and it more granular and risk-based to more accurately reflect the firms that are generating the enforcement and supervisory work. Advice to Australians cannot be made more affordable if the costs of providing that advice increase unchecked.‘
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The Stockbrokers and Financial Advisers Association (SAFAA) is the professional body for the stockbroking and financial advice industry. Our members are Market Participants and Advisory firms that provide securities and investment advice, execution services and equity capital-raising for Australian investors, both retail and wholesale, and for businesses. Practitioner Members are suitably qualified professionals who are employed in the securities and derivatives industry.